The Weinstein Co. Sale Off Again as New Fiscal Liabilities Emerge

The rollercoaster sale of The Weinstein Co. has apparently gone off the rails again after buyers reportedly discovered undisclosed liabilities totaling more than $60 million.

The setback could see the famed studio/distributor (and home entertainment unit) co-founded by Bob and Harvey Weinstein filing for bankruptcy, putting the jobs of 130 people in doubt, according to The Los Angeles Times.

TWC troubles began last year after Harvey Weinstein was accused of improper sexual behavior, including rape, by dozens of accusers – charges he denies.

The buyers, spearheaded by former Small Business Administration head (under President Obama) Maria Contreras-Sweet and investor Ron Burkle, had agreed to pay $500 million for the TWC, which included assumption of $225 million in debt.

Contreras-Sweet envisioned running the company with a female-centric board of directors, among other management moves.

“All of us have worked in earnest on the transaction to purchase the assets of the Weinstein Company. However, after signing and entering into the confirmatory diligence phase, we have received disappointing information about the viability of completing this transaction,” Contreras-Sweet said in a statement. “As a result, we have decided to terminate this transaction.”

New fiscal liabilities reportedly included $20 million in accounts payable, $17 million due in an arbitration award, and $27 in residuals, according to The Times.

The Weinstein Co. Board Confirms Asset Sale

Maria Contreras-Sweet, former head of the Small Business Administration in the Obama Administration, has reached an agreement with the New York State Attorney General’s office to purchase The Weinstein Co. – less than a week after the embattled studio’s board said the deal was off and that it would file for bankruptcy.

The award-winning studio – including The Weinstein Co. Home Entertainment – founded by Harvey and Bob Weinstein, is embroiled in myriad allegations of improper sexual conduct, including rape, by Harvey Weinstein – charges Weinstein denies.

Contreras-Sweet, together with billionaire investor Ron Burkle, had offered $500 million for TWC – a deal that apparently fell through after New York Attorney General Eric Schneiderman filed a lawsuit against TWC on Feb. 11.

Schneiderman subsequently voiced his disappointment that TWC was looking at filing for bankruptcy.

In a statement, reported by Reuters, Contreras-Sweet said investors had reached an agreement to purchase TWC assets, launch a new company, majority led by women, save about 150 jobs, protect small businesses that are owed money and create a victims’ compensation fund, among other objectives.

“We are grateful to the New York State Attorney General’s office for their efforts in helping us reach an agreement and we are grateful to our investors who have believed in this process and in the compelling value of a female-led company. We also want to thank all the parties who returned to the negotiating table to help reach this development,” read the statement.

The Weinstein Co. board later issued a statement confirming the deal.

“We greatly appreciate the efforts of Attorney General Schneiderman and his staff, Maria Contreras-Sweet, Ron Burkle and his team at Yucaipa for bringing about this agreement,” read the statement.

Schneiderman, in a statement, reiterated his support for the deal.

“Our office will support a deal that ensures victims will be adequately compensated, employees will be protected moving forward, and those who were responsible for misconduct at TWC will not be unjustly rewarded.”